From Hat In Hand To Which Hat Now For CUs In D.C.

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WASHINGTON - In the 10 years since credit unions mobilized in a nationwide campaign to pass HR 1151, the CU Membership Access Act, the perception of credit unions on Capitol Hill has changed a lot.

During that decade the credit union lobby has shown some muscle by more than tripling its financial resources on campaign contributions, boosting public relations and promotional efforts, and expanding its lobbying. This increase in visibility has brought costs with it.

"I don't think the lobbying game has changed. I think the image of credit unions has changed," offered Jonathan Lindley, a long-time CU lobbyist who worked for the California league during the effort to pass HR 1151.

"A lot of people on the Hill now see credit unions as too bank-like," said Lindley, referring to the vast increase in the size of some CUs, as well as the perceived shift in priorities. He explained that, while credit unions were often in the forefront of consumer protection initiatives, "I don't think you'd get that kind of support from credit unions today."

As an example, Lindley, who now works as chief of staff to Geoff Bacino, a member of the Federal Housing Finance Board, cited the CU lobby's partnership with the banks on bankruptcy reform, a bill that was overwhelmingly opposed by consumer groups.

"I think the perception on the Hill has changed of credit unions," said Lindley, who was CUNA's first Washington lobbyist. "It used to be that we were the good guys, doing a good job. That's not always the case, anymore."

Dean Sagar, who helped write HR 1151 as a staffer on the House Banking Committee who now lobbies for CUNA, had a similar view. "As late as '97, there was very little lobbying on the Hill by credit unions," said Sagar. "People didn't know the difference between NAFCU and CUNA and NCUA."

"The (campaign) really brought credit unions into the mainstream," Sagar asserted.

While this has opened doors for credit unions in the halls of Congress, it has had a downside, too. "You lose something with the increased visibility. You begin to look similar to banks, in a lot of ways. That's always a risk. There's not that warm and cuddly feeling (about credit unions) anymore," said Sagar. "But," he explained, "it's not just credit unions. I think all of financial services has changed. People thought more highly of credit unions, but they also thought more highly of banks, too."

Lindley worries about another trend. He sees credit unions becoming more and more isolated from the other players in the financial services lobby, banks, thrifts and insurance companies, and the for-profit entities continue their decades-old fight to repeal the credit union tax exemption. "Twenty-five years ago we used to work closely with the other groups, like the U.S. League of Savings and Loans. But the degree of civility seems to have decreased," he said. "The current hostility between credit unions and other financial institutions is not benefiting the junior partner-the credit unions. It may make good politics for the trade groups, but it's getting to the point where it's going to be very difficult to do anything on the Hill."

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